How many merchants does groupon have

Groupon: global revenue Number of Groupon active customers Share of consumers visiting coupon websites in the U. Leading discount and offer apps worldwide , by downloads. Groupon app monthly active users MAU worldwide , by operating system. More interesting topics Related topics. Digital coupons and deals. Online marketplaces. E-commerce worldwide. E-commerce in the United States. Go to report.

Stephanie Chevalier. Research expert covering internet and e-commerce. Contact Get in touch with us. We are happy to help. Vianny Gutierrez-Cruz. Sales Manager — Contact United States. Ziyan Zhang. Take an owner of a rock-climbing business that has existing equipment and a storefront. The operating costs don't change based on the number of people who show up.

A coupon deal can actually generate some extra cash by getting more bodies into the facility. Dholakia says each merchant must know their costs, factor in a price that draws customers, project the number of costumers that will buy the coupon, and estimate incremental revenues. Cons 1. Deals attract low-end bargain seekers. Because the Groupon customer base is made up of deal-seekers and bargain shoppers they might not be willing to purchase beyond the value of the coupon. So, there are low rates of spending and low rates of return.

One problem with price deals is diminishing returns; thus, merchants need to put a cap on the number of deal coupons that are to be sold, says Dholakia. Deals hurt the brand. The obsession with price doesn't necessarily make for a lot of brand loyalty or even brand awareness. One negative aspect of daily deal sites is that price promotions usually hurt the brand of the company offering it, says Dholakia.

It makes customers price sensitive. When they get something at a much lower price, they then become less inclined to pay full price for that same product or service in the future. Deals don't generate repeat customers. Groupon has a low conversion rate for repeat customers, according to marketing experts.

You may never see the person again once they use your coupon. Or that person may not be willing to buy from you again without a coupon in hand. The percent of new customers that redeem the voucher that becomes repeat visitors of the business is estimated at around 19 percent. It varies by product categories. Deals are not profitable. Another problem is the split. If you do the math, merchants need to gross margins well in excess of 50 percent for Groupon to work for them.

The promotion is very steep, usually 50 percent or more. Most businesses are built on margins of 75 percent, which means if the customer just comes in and buys the deal, the owner is going to loose money, says Dholakia. Restaurants usually have higher margins. There are better deals out there. Daily deals sites are not the only game in town.

You can run a similar promotion for less money. There are plenty of marketing programs you can use; does it make sense to use this one, asks Dholakia. For example, you can offer a discount or promotion on a Facebook fan page. After discounting its product or service and then allowing Groupon to take its cut, a company might not even make enough to cover the cost of what it's selling. If the deal doesn't earn enough repeat customers, then the merchant is worse off than before it worked with Groupon.

On the bright side, if you find that you're losing money, Groupon doesn't charge any fees to pause or cancel the service. Groupon customers are often savvy deal-seekers who purchase and use one-time coupon discounts without intending to become regular customers. Instead of offering one introductory service at a deep discount, you might try splitting your deal in such a way that requires people to give you more than one try.

For example, if you offer guitar lessons, instead of offering a coupon for half off one lesson, offer half off a package of two lessons. That way, people who purchase the coupon will need to try you twice to get their full deal, and that may be enough to convince them to sign up for more.

Setting limits on the number of vouchers sold or including restrictions to control how people can use their deals is also important, especially for small businesses.

If a deal is popular, you may get an influx of new customers and increased demand for your services, which could backfire if you're not ready for it.

As Groupon's marketplace model continues to develop, you might also try some of its newer alternatives to the voucher model, such as online booking or store pickup. Groupon is a solid advertising platform, has a good reputation among consumers, and is easy for business owners to start using.

In the short term, Groupon and similar sites can be a powerful and effective way to generate new leads for your business. Time will tell what Groupon's marketplace model will mean for merchants. Regardless, you should probably not rely solely on Groupon to grow your business.

Nor should you rely on it to save your business if you're facing serious troubles. If you are going to use Groupon, make sure you do some careful planning to ensure that you don't end up losing more money than you earn. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content.